EMPLOYMENT AGREEMENT
THIS AGREEMENT, made and entered into this 26th day of March, 1997, by
and between One Price Clothing Stores, Inc., a Delaware corporation with its
principal place of business in Spartanburg County, South Carolina, hereinafter
referred to as "Employer", and Xxxxx Xxxxxx, a resident of Duxbury, State of
Massachusetts, hereinafter referred to as "Employee".
W I T N E S S E T H:
For and in consideration of the mutual covenants and promises of the
parties hereto and the benefits inuring to the parties hereto, Employer and
Employee agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions of this Agreement,
Employer employs Employee as its President and Chief Executive Officer, and
Employee accepts such employment with Employer. The employment hereunder shall
commence on the day Employee reports for work at Employer's offices in Duncan,
South Carolina and shall continue for six (6) years from such date unless
terminated as hereinafter provided.
2. DUTIES OF EMPLOYEE. Employee shall serve Employer as its President
and Chief Executive Officer faithfully and to the best of his ability under the
direction of the Board of Directors of Employer. Employee shall be elected as a
Director of the Company immediately following execution of this agreement and
thereafter nominated annually as a Director, commencing with the annual
shareholders meeting in June 1997, so long as this Agreement is in effect.
Employee shall devote his full time and efforts to his duties as an
employee of Employer. As Chief Executive Officer of the Company, Employee shall
have the authority to hire and fire any and all other officers and employees of
the Company, excluding the Chairman of the Board of Directors.
3. COMPENSATION AND BENEFITS.
(a) Salary. For all services rendered to Employer under this
Agreement, Employer shall pay Employee an annual base salary of $400,000, which
shall automatically increase to $450,000 twelve (12) months after commencement
of employment by Employee and shall thereafter be subject to annual review,
payable in bi-weekly installments in accordance with the usual payroll practice
of Employer, less all legally required deductions. In the event Employee shall
die during the term of this Agreement, his salary shall be continued only
through the end of the bi-weekly pay period following his death.
(b) Bonus. Employee shall be entitled to a first year bonus of
$150,000, payable $100,000 upon commencing employment and $50,000 at fiscal 1997
year end; provided, however, if Employee is not employed by Employer on the
first day of fiscal 1998, Employee shall reimburse Employer the $100,000 paid
upon commencement of employment and shall forfeit the $50,000 due at fiscal 1997
year end. Starting in fiscal 1998, Employee shall be entitled to receive a bonus
of up to 50% of his base salary if the Employee's personal and the Company's
goals are met in accordance with the Company's bonus program then in effect.
(c) Special Stock Option. The Board of Directors has
approved the granting to Employee of an option for 300,000 shares of
Employer's common stock at the market price on the date of grant,
which date shall be the earlier of the execution of this Agreement or the
commencement date of employment. Such option shall be exercisable twenty five
(25%) percent on the date of employment and thereafter exercisable equally over
a period of four (4) years at 18.75% annually commencing twelve (12) months from
the date of Employee's employment. Should Employee die or become permanently
disabled prior to the expiration of a twelve (12) month vesting period, he shall
be considered as employed at the end of such twelve (12) month period during
which he dies or becomes permanently disabled for purposes of exercise of the
option granted hereunder. The options shall not be transferrable except to
members of Employee's immediate family or a trust for the benefit of members of
his family, shall have a ten (10) year term, contain typical anti-dilution and
change in capitalization provisions, a commitment to register the shares
underlying the option on Form S-8 and appropriate provisions for exercise in the
event of death or disability.
(d) Retirement. So long as Employee is employed by Employer for
a minimum of six (6) years, he shall be entitled at the end of six (6) years to
a $600,000 retirement sum payable over ten (10) years in equal monthly
installments following his retirement from the Company. For each year that
Employee remains employed by Employer beyond the initial six (6) year period,
his retirement sum shall be increased $100,000 and the aggregate retirement sum
due Employee should he remain employed beyond six (6) years shall be payable
over ten (10) years in equal monthly installments following his retirement from
the Company. If Employee does not remain employed for at least six (6) years, he
shall not be entitled to any retirement sum.
(e) Other Benefits.
(i) During the term of his employment,
Employee shall be entitled to participate in all employee benefits as are
customarily provided to its officers by Employer, and to participate in such
other employee benefits as may from time to time be approved by Employer's Board
of Directors.
(ii) Employee shall be entitled to four (4)
weeks of vacation annually.
(iii) Employee may serve as a director of a non-
competing company or otherwise participate in educational, social, religious or
civic organizations so long as such activity does not interfere with Employee's
duties hereunder.
(iv) Employee shall also be entitled to reimbursement
of all reasonable hotel, travel, entertainment and other business expenses
actually incurred by Employee in the course of Employee's employment hereunder
and in accordance with such policy as may be established for Employer's
Executives, upon submission to Employer of satisfactory documentation thereof.
(v) Employee shall be indemnified by Employer
as an officer and director to the fullest extent permitted under
Delaware law.
(f) Moving Expenses. Employer shall reimburse Employee
for:
(i) Air travel to the Spartanburg/Greenville area for
himself and his wife, which travel shall be limited to reimbursement for up to a
total of fifteen (15) round trip coach plane tickets for Employee and his wife
from Boston to Greenville/Spartanburg.
(ii) Employer shall obtain a competitive bid from an
independent moving company setting forth the cost of transportation of
Employee's family's household goods, effects and two (2) automobiles and
Employee shall be entitled to receive such amount in cash grossed up to cover
any applicable federal or state income taxation.
(iii) Upon Employee's reporting for work, Employer
agrees to reimburse Employee for up to three (3) months for the cost of
temporary lodging at a hotel or motel such as Residence Inn, such reimbursement
to cover room only, and not food or other expenses.
(iv) Reasonable closing costs associated with
buying a home, including such expenses as real estate commissions, loan
origination fee, attorney's fees, etc., but excluding discount points, prorated
taxes or insurance. Payment will be made on a receipt reimbursement or written
estimate basis.
(g) Payments Upon Termination. In the event Employee is
terminated by Employer without cause, Employer shall continue Employee's annual
base salary following Employee's termination for twelve (12) additional months
at the rate of base salary in effect at the date of Employee's termination,
payable in accordance with Employer's usual payroll practices. In addition,
Employee shall be entitled to payments of such base salary for an additional six
(6) months if unemployed at the end of twelve (12) months, provided that such
additional salary payments shall be immediately terminated upon his employment
during such additional six (6) month period. In the event Employee voluntarily
terminates his employment with Employer or is terminated for cause, he shall be
entitled to no additional payment upon such termination other than any then
accrued but unpaid salary, vacation pay, or other normal reimbursement items.
Cause shall be defined to mean (a) the commission by Employee of any felony, (b)
the commission by Employee of any crime or other activity
involving dishonesty or moral turpitude, (c) the engagement by Employee in any
act of fraud, misappropriation or similar misfeasance, (d) the engagement by
Employee in any activity in contravention of paragraph 4 of this Agreement or
otherwise resulting in a material adverse effect to Employer or (e) repeated
non-attentiveness by Employee to his duties under this Agreement; provided,
however, that prior to any termination based on cause as herein defined,
Employee shall have received written notice from the Board of Directors of
Employer stating in reasonable detail the basis therefor and shall be given an
opportunity to meet with and address the Board regarding the grounds for such
termination.
4. CONFIDENTIAL INFORMATION. Employee acknowledges that during his
employment he will have access to confidential information belonging to the
Employer. Such confidential information shall consist of all information
disclosed to Employee as a result of employment by Employer not generally known
in the retail business in which Employer is engaged including information
concerning Employer's suppliers, including the costs, quantities and types of
goods supplied, and the identity of such suppliers; information concerning the
Employer's marketing and/or sales strategy or plans; real estate strategy and
expansion plans; all pricing information relating to merchandise offered for
sale by Employer; customers' list and all information dealing with customers'
needs or preferences; all data processing information; all financial information
including financial statements, financing plans and forecasts, and any and all
information designated or marked as confidential. Employee will not use or
disclose, or otherwise make available, such confidential information to any
other person or entity without prior express written consent of
Employer, either during or following the termination of Employee's employment.
Upon termination of employment, Employee shall turn over to Employer all
property then in his possession or custody belonging to Employer and shall not
retain any copies or reproductions of correspondence, memoranda, reports,
notebooks, drawings, photographs, or other documents relating in any way to the
affairs of Employer.
5. NON-COMPETITION. (a) Upon termination of Employee's employment with
Employer, whether voluntary or involuntary and whether with or without cause,
Employee will not for a period of two (2) years from date of such termination
conduct or engage in, directly or indirectly, alone or jointly, with any other
person or corporation as agent, consultant, employee, manager, purchaser,
proprietor, stockholder, co-partner, or otherwise, any type of womens retail
apparel business involving the general retail price range(s) engaged in by
Employer at the time of termination of his employment. This restriction applies
to the continental United States and any other country or possession of the
United States in which Employer does business.
(b) Employee agrees not to employ or cause to be employed any
other employee of Employer for a period of two (2) years after Employee's
termination of employment. This restriction applies to any type of business
which Employee may be engaged in or is associated with.
6. NOTICES. All notices, consents, changes of address and other
communications (hereinafter referred to as "Notice(s)") required or
permitted to be made under the terms of this Agreement shall be in
writing and shall be (I) personally delivered by an agent of the
relevant Party, or (ii) transmitted by postage prepaid, certified or
registered mail:
To Employer: One Price Clothing Stores, Inc.
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000
To Employee: Xxxxx Xxxxxx at such address as he
may provide to Employer in writing
cc: Xxxxxxxx Xx. Tashlik
Tashlik Xxxxxxxx & Xxxxxxx P.C.
000 Xxxxxxxx Xxxxxxxxx
Xxxxx Xxxx, X.X. 00000-0000
7. WAIVER OF BREACH. The waiver of Employer of a breach by
Employee of any provision of this Agreement shall not operate or be
construed as a waiver of any subsequent breach by Employee. No waiver
shall be valid unless in writing and signed by any authorized officer
of Employer.
8. ASSIGNMENT. Employee acknowledges that the services to be rendered by
Employee are unique and personal. Accordingly, Employee may not assign any of
Employee's rights or delegate any of Employee's duties or obligations under this
Agreement. The rights and obligations of Employer under this Agreement shall
inure to the benefit of and all be binding upon the Employer, and its successors
and assigns.
9. REPRESENTATIONS AND WARRANTIES. Employee represents and warrants to
Employer that he is under no obligation to or bound by any contract with any
person, corporation or other entity which would prohibit or in any way interfere
with the performance of his duties and obligations to Employer under this
Agreement.
10. SEVERABILITY. If any provision of this Agreement as applied
to either party or to any circumstance shall be adjudged by a court to
be invalid or unenforceable, the same shall in no way affect any other
provision of this Agreement, or the application of each provision to
any other fact or circumstances.
11. ENTIRE AGREEMENT, MODIFICATION OR AMENDMENT. This Agreement
constitutes the entire agreement of the parties with respect to its subject
matter and supersedes all prior oral or written agreements. This Agreement may
be modified or amended from time to time by the mutual agreement of the parties
hereto. No modification or amendment of this Agreement shall be binding upon
either party unless it is in writing and executed by the party sought to be
charged.
12. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one
instrument.
13. CAPTIONS. The captions contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of South Carolina, without giving effect
to South Carolina's rules of conflicts of law, and regardless of the place or
places of its physical execution and performance.
15. ENFORCEMENT. This Agreement may only be enforced in a court of
competent jurisdiction in Spartanburg County, South Carolina. Employee agrees to
submit to the jurisdiction of a court of competent jurisdiction in Spartanburg
County, South Carolina, whether or not then residing in South Carolina. The
prevailing party shall be entitled to recover from the other party the cost of
any court action, including reasonable attorneys fees.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
Witnesses: One Price Clothing Stores,
Inc.
/s/ Xxxxxxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxx, Xx._(SEAL)
Xxxxx X. Xxxxxx, Xx.
/s/ Xxxxx X. X'Xxxxxx Chairman of Board of Directors
As to Employer
"EMPLOYER"
/s/ Xxxx Xxxxxxx /s/ Xxxxx Kelley________(SEAL)
/s/ Xxxxxx Xxxxx Xxxxx Xxxxxx
As to Employee
"EMPLOYEE"
